High exchange netflows and low trading volume are the reason to have fear for Bitcoin’s future, according to some analyzes. These concerning signs are beginning to become visible for bitcoin’s price. At least in a short-term time period. This is based on a well-known analyst analyze. Exchanges companies are here to work with Bitcoin, not just hold them!
Some of the factors to be concern for Bitcoin, are:
- Firstly, the price for BTC is shaky recently. In the result of that, it is unable to effectively break out in any direction.
- Secondly, last week, we witnessed bitcoin falling as low as $31K only to recover and touch $38,500 days later.
- And now, nevertheless, the early cryptocurrency is trading at around $35,500 for a 4% loss on the day.
- Explanation on the most late price action was Ki Young Ju, the CEO at crypto analytics company CryptoQuant.
In addition to those factors, one of the things that makes us worry about BTC is exchange netflows. There are many bitcoins that are flowing into exchanges companies. But, recently the trading volume is still relatively low. BTC requires more trading volume to break down increasing exchange inflows.
- To make it clear, exchange inflows and outflows are important to monitor, because they disclose the short-term potential of selling.
- If there are many bitcoins pilling up in the exchanges, so there are many bitcoins that can be traded quickly. Big investors don’t keep their Bitcoins on exchanges. Except if they want to be able to get rid of them fast.
- On the other side of the coin, if there are bigger outflows, this means that investors are moving their assets out of the exchange. They do it to hot or cold storage. Potentially showing a less remarkable attempt to sell.
All of these factors, making us to worry alot about the future of Bitcoin, and also the whole crypto market for that matter.